Would You Pay for Online Applications?
A few days ago, CenterNetworks asked whether anyone would pay $1/month to subscribe to an RSS feed or, perhaps, $4.95 for a package of 10 feeds.
Not surprisingly, the response was unenthusiastic. With so much content being pumped out every day, how many blogs are worth $1 - especially when many people are reluctant to pay for “professional” editorial content from the New York Times, Wall St. Journal, et al.
But what about online applications, particularly those you use on a regular basis? Would you pay $1 to $2/month to use Google Reader, for example. What about Wordpress? After raising $29.5-million, Wordpress will probably be looking to create new sources of revenue, so would you balk if they instituted a $1/month service fee for something you use every day?
What about $3/month for a package that included Wordpress, Google Reader, del.icio.us, Google Docs, Facebook and Twitter?
And what about one-time fees? Earlier this week, I was looking for a way to convert a Word document into a PDF. After a quick search, I found PDFOnline, which offers a free conversion service. It worked so well that I would have gladly paid 50 cents or $1 if it was required.
Unfortunately, there are probably few people would actually pay for online applications, even if they really liked them. We live in a world of free with the idea of freemium (the concept of paying for premium services) looming in the background but sadly ignored.
At this point in the game, getting people to change their behavior would be extremely difficult, if not impossible, unless many of the major service providers (Yahoo, Google, Microsoft, etc.) got together and decided free wasn’t working any more. Of course, this scheme would quickly stop working as opportunistic players offered free services.
Still, you have to wonder an ad-supported service marketplace can continue to stay vibrant. Sure, development and server costs have dropped dramatically but there’s no such thing as a free lunch any more right?
Technorati Tags: del.icio.us, Facebook, Google Reader, Twitter, Wordpress
January 30th, 2008 at 9:21 am
great post - it’s such an interesting question. pay $5 for a lattee but won’t give 2 cents for a web app.
January 30th, 2008 at 9:24 am
There are a couple of things to take into consideration when looking to charge money.
1. The cost itself
2. The transaction process.
In regards to the cost it’s not as simple as you might think. If the price is above free, but still “too low” then people will actually be LESS inclined to pay than if it were higher. That is people would be more willing to pay $5/month for an RSS feed instead of $1. But if you charge $10/month that’d be too much. I’m just pulling these numbers out of thin air, but you get the idea.
Then there’s the actual transaction itself, which is related to the cost. If I’m only paying a dollar, is it really worth my time to pull out my credit card and go through that 5-10 minute process? Not really. If there was some sort of universal payment mechanism that made it stupidly easy one-click pay kind of thing, then people would be FAR more likely to spend. Even things like PayPal and Google Wallet are too much of a pain. I’m talking about going to an blog, clicking on the subscribe button and a pop-up saying “Pay $10 for this feed” You hit yes, and that’s it.
Of course if people are paying for feeds they’re going to expect a certain level of commitment out of the writer. I don’t want to pay money and then have the blogger get sick and not write for a week or two.
Are bloggers willing to put up with that level of commitment?
January 30th, 2008 at 1:08 pm
Interesting topic for sure…
My opinion is that people are willing to pay for online apps that facilitate the revenue-generation process, or - simply put - help them make money.
Apps the like 37signals suite remove many hassles and streamline the work process. Having such systems in place can improve efficiency significantly. In other words, the ROI is high. There is a case to be made.
Also keep in mind that you can’t count on reliability and support for free apps…
Cheers,
Aidan
http://www.MappingTheWeb.com
January 30th, 2008 at 1:32 pm
Omar: I agree that it would be a pain to buy single applications but PayPal wouldn’t be too much of a hurdle for a monthly bundle.
Aidan: Good point, although I would also suggest really useful/valuable services such as Wordpress should be able to get people to cough up a small fee each month.
January 30th, 2008 at 3:25 pm
I pay less than $1 for an entire printed newspaper. Why would I pay $1 for a single blog feed? Besides, the more valuable blogs already monetize themselves through ads.
I pay for products that prove valuable to me, for which there is no reasonable free alternative. By the way, CutePDF will create PDFs for you.
For example, I bought NetNewsWire when I got my Mac, even though there were alternatives. Of course that is now free too.
January 30th, 2008 at 4:00 pm
Larry: I, too, would find it difficult to pay for a blog feed. I would pay for an ad-free service if it was really useful.
January 31st, 2008 at 9:36 pm
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